Orchard Lodge in Anerley, South London, which is run by a private company, the Glen Care Group, is facing closure at the end of June when its contract with the Youth Justice Board ends.
Managers say boys at the unit will be moved miles from home making it harder for families to visit and provide vital support.
"As it stands at the moment the contract we have with the Youth Justice Board ends at the end of June 09 and unless it is extended or there is a change of mind we will close," said director of children's services Dennis Scotland.
"We through there might be a reduction in places but as we're the only secure children's home in London, we did not in our wildest dream expect to close."
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